Seattle Mayor Ed Murray said he would pursue a sales-tax increase to raise money for programs to fight homelessness. (Ellen M. Banner/The Seattle Times)
Barely a month after announcing it, Seattle Mayor Ed Murray and entrepreneur Nick Hanauer are scrapping their plan for a $275 million homelessness property-tax levy.
Rather than ask city voters to approve the levy in August, Murray now intends to work with King County Executive Dow Constantine on a 2018 ballot measure that would use a 0.1 percent sales-tax increase to combat homelessness, the mayor said Monday.
“We’re moving away from the property tax,” Murray said in a meeting with The Seattle Times editorial board.
The move represents an abrupt change in direction for Murray, who touted the levy in his State of the City address in late February, saying it would nearly double Seattle’s spending on homelessness in an effort to move people from the streets into housing.
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Supporters of the five-year levy began collecting signatures only two weeks ago, planning to qualify the measure for the August ballot as a citizen initiative.
Murray is pivoting not because he believes city voters would reject the levy but for other reasons, he said Monday. The mayor said partnering with the county on a 0.1 percent sales-tax hike would raise more money than a Seattle-only levy would have.
And postponing a vote until next year would give the city and county more time to make headway on reforming their homeless-services systems, Murray said.
The city intends later this year to bid out its contracts through a competitive process for the first time in more than a decade, using new performance metrics.
Some critics of the levy proposal asked why voters should green-light additional money before the more progress has been on that front. Thousands of people are living without shelter in the Seattle area, many of them in tents and under bridges.
There was some confusion following Murray’s February speech about who exactly was the driving force behind the homelessness levy.
The mayor initially cast the plan as his own and said he had asked Hanauer to help head up an advisory group tasked with drawing up the details.
But Hanauer, a superwealthy venture capitalist and political donor, then told The Seattle Times that he had brought the idea to Murray and had been working on it for many months.
“We just decided we were going to do something, and no one can stop that. And once that bus leaves the station, people can get on or get run over,” he said.
Rather than send a proposed ballot measure to the City Council himself, Murray clarified that the levy would move ahead as a citizen initiative, with Hanauer bankrolling and leading the campaign.
The plan called for $185 million to be spent on providing more people with access to permanent supportive housing and on increasing subsidies for renters.
Another $55 million was to be spent on hiring more outreach workers and on converting overnight shelters to 24-hour facilities.
And $25 million was to be spent on expanding treatment for people dealing with substance abuse and mental illness.
The plan earned some pushback from people worried about the city enacting another in a long series of property-tax levies. Critics called the measure a regressive tax that would hit lower-income people hardest.
A sales-tax increase next would also be a regressive tax, and it would be the second-such hike in two years.
Just last month, Constantine proposed a 0.1 percent sales-tax increase to raise money for arts, science and culture programs. The Metropolitan King County Council is considering that measure, which would appear on the August ballot and would raise a projected $469 million over seven years.
Murray on Monday said Constantine’s arts proposal took him by surprise and triggered a conversation that led to the new plan for homelessness funding.